PHL Infrastructure: Whose delay, who's to blame

The blame game

By whose law?

It has become the done thing nowadays that the learned are sometimes befuddled, nay, flabbergasted by the way the trained lawyers of this administration think. At the recent groundbreaing for the new Supreme Court Complex at BGC (Bonifacio Global City) the guest speaker (guess who?) - a trained lawyer quipped that the SC's new building was being afforded by the Executive branch to help the Judiciary, streamline the delivery of justice. As is the case of delivery to a captive audience from the bully pulpit, it was a not so subtle reminder to the assembled Supreme Court justices that the law of debt of gratitude, the focal point of patronage politics as practiced by “tradpols” (traditional politicians), was the order of the day between the supposed two co-equal branches of government.

Shot across the bow

No surprises then as good manners has not been the hallmark of the uncompromising crusaders of the straight and narrow. The same can be said of the unconcealed open cajoling of the Senate by accelerated disbursement of funds for PDAF (Priority Development Assistance Fund) projects plus a night-time ride driven by no less than the DILG Secretary, just to ensure chief Justice Corona's impeachment. At least, in this case, it was the Supreme Court justices who acted as the repository of good manners, by showing no reaction to such a “shot across the bow”.

Court delays, really?

At the same affair, the President scored the Supreme Court and all courts in general for causing the delay in his vital PPP infrastructure projects, i.e the NAIA Skyway, too late to be of use for the November APEC (Asia Pacific Economic Conference) meeting. This time, he came well armed with statistics counting the number of days or months delayed, tantamount to a TRO (temporary restraining order) whenever a RROW (road right of way) expropriation is challenged in court. To this the Supreme Court countered that, sure, they will look into the reasons for the delay but they added that the courts of law operate on being what they are; being just. And it is only just that the government, despite the right of eminent domain, cannot just run roughshod and confiscate or bulldoze private property, without due process, without respecting the rights of the owners, rights enshrined in the Constitution.

Fair and just compensation, by whose law?

It is a fact to live with that private property owners, defending their right to “fair and just compensation” in exchange for expropriation, have no resort but to appeal through the courts when a government wants to bulldoze their way to infrastructure projects. We agree RROW (road right of way) acquisition delays for the NAIA Skyway, besides aggravating traffic, didn't even make it to the much vaunted APEC (Asia Pacific Economic Conference) this November. The much needed NLEx Harbor Link expressway, the main route for harbor bound trucks to avoid the busy city streets, is also delayed by the same RROW issues. The vital Fort to Capitol Commons Pasig River bridge, connecting Merit Avenue on the Fort side to Santa Monica street on the Pasig side is delayed because of RROW issues through the residential zone of Pasig's Barrio Capitolyo.

Piqued and moody

Indeed, the President is right in getting piqued by these delays, even if he wasn't in a sour mood. But as the Chief Justice hinted, how about the rights of the property owners? We know this side pretty well. The latest encounter we had with this is in my hometown. We own property beside a national road that long needed a drainage upgrade and widening in anticipation of North Rail then and North-South Commuter Rail now. When DPWH finally got going, the contractor bulldozed our property's 1928 Art-Deco fence and proceeded to dig a deep trench across the property driveway. It's a good thing that our property was vacant, save for the ruins of a very old ancestral home. It doesn't matter anymore that the widening loped off a good 5.0% of our lot's wide frontage area, but in order to reclaim just compensation, we have to go through a long legal process and at the same time fork out a substantial amount to fence our lot, so that squatters won't lay claim. And what compensation are we looking forward to, if and when we succeed in the claims process? Not much for 300 square meters judging by dirt cheap zonal valuations.

Quote Dylan Thomas

What did we do? To "go gently into the good night" or "rage against the dying of the light"? Well, we don't recommend this to anyone, most specially the Santa Monica residents of Barrio Capitolyo and we are not doing it just to wrap the flag around ourselves. We decided to offer the DPWH contractor use of our lot as their staging area, heavy equipment depot, barracks, deployment center, etc., (in short, their operations HQ), while they widen the rest of the national road. Free of rent, gratis et amore, our contribution to the gazillions that would have been counted as savings to be re-disbursed, though unconstitutionally last time I looked, in the pursuit of development projects like PDAF. Our only condition is that, before the contractors leave, they re-erect our temporary metal fence, level the jagged ground and flatten those holes that could cause standing water to breed dengue bearing mosquitos.

Vested interest, sincerely

Before you think us oh so altruistic, we were not willing to spend our time printing official receipts, registering with the BIR (Bureau of Internal Revenue) for VAT (value added tax), paying VAT and filing monthly tax compliance and remittances just to collect rent. Then we would have to give ourselves a salary, income tax deducted of course, file such income tax returns, do some bookkeeping, get a certified public accountant to do our books and have the books stamped by the BIR. We might even have to attend and pay for a tax seminar or two, then hire a bookkeeper. Just for some measly token monthly rent? Fuggedaboutit! Never mind if the DPWH widening project will take years..

Nightmare on Barrio Capitolyo street

But our personal case is different to those poor owners - we mean pitiful, not “poor” poor – of family residences in Santa Monica, Barrio Capitolyo that would have to be bulldozed for the new approach road for the new Pasig River Bridge to BGC. These are multi-generation family homes that no mere zonal value compensation can ever come even close to compensate even one tenth the value of replacement cost of dwellings in similar grade subdivisions. Never mind the emotional baggage of memories, the paltry compensation to these homeowners is why they will sue to resist expropriation. To better imagine this for the President's case, think of a Quezon City Subway burrowing up to the surface to establish a station where Ninoy and Cory Aquino's split level house on Times Street stands. Granted the eldest and only boy will return to roost there after 6 tumultuous years living in the “House of dreams” inside Malacanang Palace, how would he and his 4 sisters feel?

Proposal

But as the President insists that every media critique proffers a solution, we offer ours. With all the front end financial component money PPP projects receive (stiff?) from PPP winning bidders, fair and just compensation for expropriated properties should rise up to fair market value – honest to goodness fair market value. Plus replacement cost for the standing structure at current prices. With this, it will only be the greedy and court suit addicts who will still engage in such serious legal delaying tactics. Moreover, since the government will be paying at fair market value, this will raise the zonal valuation of the area, thus, raising the annual real estate tax charges and intake of the municipality. Capital gains tax alone would accrue to DoF Sec. Purisima's purse. Yes, we know, this is easier said than done, as we are afraid that since this idea is so simple and makes sense, we fear that it will never never be applied. The “Hyatt ten”, the powers behind the palace throne, DoF's Ces Purisima particularly, would fight tooth and nail against such larger payment to claimants. So, Mr. President, you too will have to live with the delays.

SCTEX turnover, NO WAY!

But it is not just the court process that is causing the delay in vital infrastructure projects. In fact, it is a mystery what motivates the Palace to condone or if not neglect the actions of the BCDA (Bases Conversion Development Authority). To this day, nine months after a beaming Atty. Casanova, complete with yellow tie, signed the “turnover” of the SCTEx to Metro Pacific Tollways there has been no turnover, nor notice of when, never mind why or why not. In fact, the whole saga of the BCDA's non-turnover of the SCTEx has been going on since 2009. Back in 2009, BCDA deferred implementation of the signed contract turnover. In 2010, BCDA cancelled it and rebid the project, only to be won by the same Metro Pacific Tollways. Then BCDA, under alleged guidance by the Palace and the DoF, kept tweaking the signed and agreed financial terms, to which MetroPac sweetened several times over. Then after getting their sweet way, the Palace required another bidding. Which was again won by MetroPac. Still no turnover. It took Sen. Drilon and Sec. Abaya to get stuck in multi-toll gate traffic queues in 2014, caused by the refusal of BCDA, since 2013, to allow NLEx to integrate collections with SCTEx, to finally have the turnover enacted. Signed with ceremonial fanfare last February, with major constructions being already done by MetroPac on both NLEx and SCTEx, BCDA has not yet turned over the SCTEx at all. What is going on here? But then, this is the same law-unto-thyself BCDA that mixes up LESSOR for LESSEE insisting to the Supreme Court that BCDA evicts the individual hotel unit owners that lease their rooms to Camp John Hay Manor/Suites and Forest Lodge, confusing one for the other.

NEDA Limbo for the NLEx Metro Link connector expressway

Now we turn to the NLEx Metro Link connector expressway. Yes, again by Metro Pacific Tollways. Proposed in 2009, at first considered as unnecessary competition to Skyway Stage 3, the President wisely decided in 2011 to allow the construction of both stage 3 and connector. The NLEx connector, which was to minimize RROW expense by running over the PNR Rail tracks and incorporating a stack-elevated North-South Commuter Rail (DoTC Sec. Roxas's idea) was an unsolicited proposal, an ordinary private sector to public sector phenomenon when the public sector lacks the imagination to propose such projects. But for reasons only understood to the Palace, unsolicited proposals are frowned upon, notwithstanding that the necessity of a “Swiss Challenge” is already a safeguard from lop-sided deals. So Metro Pacific, on the advise of government, proceeded to tack the project to its existing NLEx franchise as part of the overall PNCC franchise for tollways existing before 2010. Nevermind if the Palace itself was confused about allowing the extension of the corporate life of the PNCC, then blaming the PNCC for the delay of C-6 Metro Manila Expressway in a SONA (state of the nation) speech and even appointing a seasoned PNCC veteran to head the ailing state corporation. But then low and behold, by 2014, the Department of Justice opined that extension of the PNCC franchise is not good enough and that unsolicited proposal must meet a “Swiss Challenge”. Three NEDA (National Economic Development Authority) Board meetings since the summer of 2015, and the NEDA, chaired by the President, has not even included the “Swiss Challenge” in its agenda. Again, who is causing the delay here?

Daang hari, the first and the oldest PPP

Daang Hari expressway, now redubbed the MCX or Muntinglupa Cavite Expressway, was the first PPP project awarded to Ayala. Derided as overpriced on account of the PPP's requirement of a financial component, the 4.0km expressway took almost 4 years to build. The first problem was a mismatch of interchange plans between the SLEx (South Luzon Expressway) and the MCX. This was due to the greenness of the DPWH designers of the project. After this was settled, more delays came by when the project was nearing completion as Ayala was planninga retail strip near the Villar's Evia complex Daang Hari end of the MCX. When this was revealed, ex-Sen. Villar, feeling his Vista Land communities and commercial complexes lining Daang Hari were threatened with competition, made noises of starting a legislature investigation of the MCX contract. Ayala had to back down, in order to have the MCX inaugurated by President Aquino at least a good one year before his term ended. It's a pity that Ayala, the same company that saved Villar from the collapse of Camella Palmera homes during the '98 Asian Financial Crisis failed to take into account the commercial and business history of the Villars. This is the same Sen. Villar, who along with his Senate colleagues at that time, rerouted C-5 into a circuitous and longer detour from connecting with CAVITEx, in order to allegedly provide access to the Villar land bank of upcoming subdivisions in the Villar fiefdom of Las Pinas. So it's not surprising that the same Villars who lord it over Las Pinas, are making environmental protests to favor some alleged bird sanctuary on a ten year old dumpsite on the danger path of NAIA's runways against SM plans to continue Manila bay reclamation up to coastal Cavite. And who are the greatest beneficiaries of the MCX? All the Villar communities lining the Daang Hari highway. MCX was supposed to declog Ayala Alabang's Commerce Avenue, but that was not to be.

In fairness

Now, to comply with the President's wishes that media be fair, we proceed. When San Miguel Infra wanted to wisely recast the last segment of TPLEx (Tarlac Pangasinan La Union Expressway) from Urdaneta to Rosario, La Union from 1x1 carriageway to 2x2 carriageway, the NEDA Board was able to table the revision of the TPLEx terms in a few months time. Never mind if the actual construction of the last segment of TPLEx is delayed by RROW issues again but partly because there were three cross Pangasinan paths to choose from. The ideal path, in our opinion was the path recommended by ex-Congressman Mark Cojuangco. His recommended path is the longest, but goes through the least arable land and ends just west of Rosario, allowing traffic heading to points further North to avoid the Baguio bound traffic turning off to Kennon and Marcos Highways.

RROW delays

But as the president said, the RROW delays are really numerous. Skyway Stage 3 cannot even begin to build in the area between Plaza Dilao and PUP because of all those residences that sprouted under the Pasig River Bridge that connects to V. Mapa, built in 1999. This is a critical part of the so-called common alignment shared by Citra's Stage 3 and MetroPac's connector. The NLEx Harbor Link Segment 10, the cure for the truck traffic crowding C-3 and A. Bonifacio, is slowed by RROW issues. And the all important EDSA NLEx alternative route for C-5-Luzon Avenue-Mindanao Avenue or NLEx segment 8.2, hasn't even begun clearing much of the squatters on Luzon Ave. The aforecited are RROW delays caused not only by the legal process of expropriation but also the legal process of evicting squatters, sometimes coddled by local governments.

TRB causes more infrastructure delays

Though it may no longer be a priority concern of the current administration, RROW delays are also hampering the groundbreaking of the CALAx (Cavite Laguna Expressway) from Mampalsan to CAVITEx Kawit. TRB or the Toll Regulatory Board also has its share of blame in delaying expansion and upgrading expressways. By refusing to abide by toll rate increases for many years now as provided for in the Tollways Operations Agreement, expansion of the SLEx to 5x5 carriageway from Filinvest to Southwoods, 4x4 carriage way from Santa Rosa to Calamba has been put on hold. The final 2.0-kms of 2x2 carriageway expansion of the STAR tollway approaching the Batangas toll plaza was also put on hold, as San Miguel Infra was duped by the TRB into expanding the Lipa to Batangas segment to 2x2 carriageway, without any surety that the toll rates would rise upon completion. The 2014 planned expansion of NLEx to 3x3 carriageway from Santa Rita to the Candaba viaduct up to San Fernando, and the expansion of the Balem to Sta. Inez portion from 1x1 to 2x2 carriageway was also put on hold because the TRB has not approved any toll rate hike since 2010. The SCTEx, which advance funded and built additional exits has not had any toll rate adjustments since 2008. CAVITEx, which has just gone through a heavy refurbishing and major reclamation has toll rates still frozen by the TRB since 2010. The TRB is known for such heavy handed neglect of obligations, just like when it prevented Citra from charging toll for more than a year for the first segment of the NAIA Skyway. Private sector infrastructure investors are not optimistic with any change in TRB culture once the Plaridel bypass expressway, LLDE (Laguna Lake Dike Expressway), Central Luzon Expressway, TR4 or toll road 4 SLEx extension to Lucena and the NLEEx or North Luzon East Expressway are up and running.

The root cause, Mr. President is....

True, the president is right that infrastructure delays are being caused by the slow court process. Problem is, the courts are not the root cause of the delays. The root cause of the delays are the TRB, BCDA, NEDA and some local governments who coddle squatters. We don't know what power the President can use to make the squatters obey the law. Perhaps, the DILG mega budget for relocating squatters, used as claimed and not for electioneering, may be the key? As for the TRB, BCDA and NEDA, well these are all under the Executive branch – not the Legislative, not the Judiciary. BCDA and NEDA are directly under the Palace. TRB is chaired by the DoTC. The DoTC, like all Cabinet Departments are under the Executive branch. There, Mr. President, the root cause for infrastructure delays is under your very nose.

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